Post-9/11: Tenants leery of landmark office buildings

Did the 9/11 terrorist attacks in New York and Washington hurt the real-estate market around landmark office buildings? The answer is “yes,” because of the drastically higher perceived risk of large-scale terrorist attacks in central business districts, according to research by economist Alberto Abadie and real-estate analyst Sofia Dermisi. (National Bureau of Economic Research [NBER] Working Paper No.12678.)

They studied office vacancy rates in Chicago, at and near three landmark buildings: the Sears Tower, the Aon Center and the Hancock Center. The result: “After 9/11 office properties in the three main Chicago landmark buildings and the surrounding areas experienced more severe increases in vacancy rates than office properties not located in the vicinities of landmark buildings.”